FEATURED ARTICLES ABOUT REAL ESTATE COMPANIES - PAGE 2

In a chat with ET Now, Dipan Mehta , Member BSE and NSE, shares his views on the real estate space. Excerpts: ET Now: Is the move by real estate one-off or do you think that there could be conviction building in the sector? Dipan Mehta: I hope investors do not get swayed and enter into such stocks as those business models have a lot of flaws and the balance sheets are extremely leveraged for a lot of real estate companies. These are not companies which have delivered good returns to shareholders . They have not been massive value creators and they have been underperformers and in fact, destroyed lot of value for investors.

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his views on the real estate stocks . Excerpt: ET Now: Would real estate be a pick with you? Deven Choksey: Selectively, one cannot say that one would not like to buy it. It is an opportunity in many select companies, including some of the real estate companies. We will have to go company by company in picking up your ideas. As some of the managements or the promoters in the past have shown the appetite for higher amount of risk and the inorganic growth, so they could be little vulnerable to the portfolios.

In a chat with ET Now, Deven Choksey of KR Choksey Securities shares his views on the real estate. ET Now: Anything in real estate that you are touching or are you leaving them out completely? Deven Choksey: Real estate business will take time to pick up. At this point of time, at least in the next two to three quarters, the visibility for higher earnings is not coming up in most of the real estate companies. Having said that, the business condition is improving and that could possibly mean better business going forward.

MUMBAI: Invest in their apartments, and you will get rich. But invest in their shares and you will be poorer. Unlike in other sectors, values of shares of listed real estate companies do not reflect the growing value of their products. Sample this: Investments made in shares of real estate companies like Delhi-based Unitech and DLF, Mumbai-based Indiabulls Real Estate or Bangalore-based Purvankara in 2008 would have crashed to half or to a fifth of their value by now whereas in the same period, returns from investments made in homes built by the same companies would have risen anywhere between 50% and 150% or more.

NEW DELHI: Market regulator SEBI is understood to have disfavoured real estate companies giving futuristic valuation of land with them in their draft prospectus for public offers, a move that could affect the fortunes of many companies like DLF and Omaxe. "There should not be any disclosure of land values based on the future developed value of the land," SEBI said in a note on IPOs by real estate companies. As of February 14, there are seven draft offer documents of real estate companies filed with SEBI.

MUMBAI: Mauritius-based India Real Estate Infrastructure Fund's first round of fund raising exercise will come to an end by June by which it plans to mop up $100 million. Launched in January, the fund targets a mop-up of $250 million from across the world for private placements in Indian real estate companies. Balance $150 million will be raised in the following closures. "We plan to invest the money in unlisted Indian real estate companies under the FDI guidelines.

COIMBATORE: The spectacular rise in stock prices of real estate companies in the past three months has catapulted their enterprise valuation (EV), thereby lowering solvency risks significantly . The surge in market capitalisation (m-cap ) has resulted in EV of some major realty companies jumping up to 80% in March-July period. The m-cap of DLF, the country's largest developer, spurted from Rs 23,667 crore on February 4 to Rs 57,297 crore on July 17, NSE data shows.

MUMBAI: India Ratings & Research has maintained a negative to stable outlook on the real estate sector for 2014-15 on the back of continued weak end-user demand and adverse consumer sentiments. Real estate companies have been facing falling unit sales, flat revenue and EBITDA margins and continued deterioration in credit metrics and cash flows, the rating agency said. Most of real estate companies rated the agency have a stable outlook, as the risks impacting the sector have been factored into their ratings.

MUMBAI:Rating outlook for the Indian real estate sector continues to be Negative for second half of 2012, due to persistent sluggish demand, high construction costs and liquidity pressures, rating agency Fitch Ratings said in a report Monday. According to Fitch, in the backdrop of Reserve Bank of India's caution on interest rate cuts, high equated monthly installments (EMIs) will continue to be a deterrent for potential home buyers. This, along with high property prices and elevated inflation will keep demand sluggish, the report said.

MUMBAI: The government has pushed the pedal on reforms by clearing the ordinance to amend the Land Acquisition Act. Land purchases for five purposes, i.e. infrastructure projects, affordable housing, industrial corridors, defense purposes, and rural infrastructure, have been exempted from both the consent clause and the social impact assessment. The market has taken the decision positively and infrastructure stocks have rallied nearly 7 per cent in anticipation of a pick-up in business.